In this article, we discuss the 2 great penny stocks to buy now along with the current market conditions and their potential effect on penny stocks.

Banco Santander, S.A. (LSE: BNC)

Live share price as of July 25, 2024: £3.75

Banco Santander, full name Banco Santander, S.A., is a Spanish multinational commercial bank and financial services company.

Founded in 1857, it has grown to become one of the largest banks in the world by market capitalization and is a significant player in the European and global banking industry.

Banco Santander just reported earnings for Q2 2024. Profit soared to EUR3.2 billion, marking a 20% surge from Q2 2023. The Efficiency Ratio saw a remarkable enhancement, narrowing by 261 basis points to 41.6%, reaching its peak level in 15 years. Total Revenue hit a record high driven by robust Net Interest Income (NII) and fee earnings. Moreover, Net Operating Income achieved double-digit growth for the ninth consecutive quarter.

iQIYI, Inc. (NASDAQ:IQ)

Live share price as of July 25, 2024: $3.06

iQIYI, a Chinese digital streaming service often likened to China’s version of Netflix, functions as a subscription-driven on-demand video platform, providing a diverse array of licensed content, original shows, films, series, variety programs, and digital entertainment options to its user base.

During the first quarter of 2024, iQIYI disclosed earnings amounting to 7.9 billion yuan ($1.1 billion) in revenue and 944.8 million yuan in operating income. Notably, its operating income margin saw a significant rise to 12 percent, reflecting a yearly growth of 10 percent. Moreover, the latest data underscores iQIYI’s consistent positive cash flow over the past eight quarters.

Penny Stocks: Opportunities and Risks

Penny stocks, typically low-priced securities traded over-the-counter, present both opportunities and risks for investors.

Opportunities:

• Potential High Returns: Penny stocks have the potential for significant price appreciation in a short period. Due to their low prices, even a small increase can result in substantial percentage gains.
• Early Investment in Growth Companies: Some penny stocks represent early-stage companies with innovative ideas or disruptive technologies. Investing in these companies at an early stage can lead to substantial returns if the company succeeds and grows.
• Diversification: Penny stocks can offer diversification benefits to an investment portfolio. Including these stocks alongside more established investments can help spread risk across different asset classes.

Risks:

• Volatility: Penny stocks are highly volatile and can experience sharp price fluctuations. This volatility may lead to significant losses if the stock price declines rapidly.
• Lack of Liquidity: Penny stocks frequently exhibit minimal trading activity, posing obstacles to executing buy or sell orders at preferred price levels.
• Limited Information: Many penny stocks are not subject to the same regulatory requirements as stocks listed on major exchanges. As a result, information about these companies may be limited, making it harder for investors to conduct thorough research and due diligence.